MNI BRIEF: BOJ On Hold, Keeps Policy Forward Guidance

The Bank of Japan board Friday held easy policy as expected as the economy largely continued moving in line with the baseline scenario despite lingering downside risks and uncertainties.

The BOJ also left the forward guidance for the policy rates, indicating the policymakers are vigilant against the near-term downside risks to the economy and saw the need to keep an easing bias regarding the outlook for monetary policy, (See: MNI STATE OF PLAY: BOJ To Stay Easy Despite Weak Yen, Yields).

“For the time being, the BOJ will closely monitor the impact of Covid-19 and will support financing, mainly of firms, and maintain stability in financial markets, and will not hesitate take additional easing measures if necessary, and also it expects short- and long-term interest rates to remain at their present or lower levels.”

On the monetary policy, the board decided voted 8-to-1 to stand pat on the yield curve control policy and the asset purchases, maintaining its recovery scenario based on accommodative financial conditions, and the government’s economic measures.